Storm Losses At $1.5 Billion

Published: April 14, 1993

OLDWICK, N.J., April 13—
The A. M. Best Company said today that the March storm caused insurance companies $1.5 billion in losses in 24 states and the District of Columbia.

The sum is nearly twice the rating agency's initial estimate of $800 million, released last month. It was based on comparison with storms in November and December.

Catastrophes have pushed insurance industry losses in 1993 to $2.2 billion, Best officials said. Among the costliest was the World Trade Center bombing, which is estimated to have cost $510 million in damage. Storms in Texas and Kansas last month caused $125 million and $35 million in damage respectively.

"The industry was hoping to return to more normal levels of catastrophes in 1993, but through March, it has yet to happen," said John Snyder, the senior vice president of Best's property-casualty division. "We currently are on track for another costly year, and we have yet to get through the deadly August-through-October months."

Catastrophes and a low interest rate environment resulted in a 2 percent decline last year in the industry's pretax investment income, its first ever, Mr. Synder said. He added that the industry is more vulnerable to catastrophes because of a rate war and the lack of affordable catastrophe reinsurance.